Use the Information Below to Answer the Following Questions

question 41

Multiple Choice

Use the information below to answer the following questions
Aqua Ltd has forecast the yearly demand for its product as 5,000 units. 100 units of material must be used to produce the product. The cost of placing a single order for raw materials is $20, and the cost of holding one unit of material is $0.40 a year.
-The statement that is not true concerning the just-in-time inventory management system is:

• A)The problem of holding inventory is shifted to the supplier.
• B)The aim of the system is to eliminate the need for the business to hold inventory.
• C)The approach is a theoretical one only and has not really been tried in practice.
• D)For the system to work, there must be a close relationship between the business and its supplier.

---

Definitions:

Carrying Value

The recorded net value of an asset or liability on a company's balance sheet, considering factors like depreciation or amortization.

Trademark

A symbol, word, or phrase legally registered or established by use as representing a company or product.

Equity Method

An accounting technique used to record investments in other companies by recognizing the investor's share of the investee's profits or losses.

Voting Shares

Shares that give the shareholder the right to vote on company matters, such as electing the board of directors.